Economics MCQs

Page No. 212

The Relative price (MRT)of S in terms of T i ?


a2

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b 1/2

✓


c00

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d1000

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View Answer 1/2

Country A has the comparative advantage in ?


aWine

✓


bBeer

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c Both wine and beer

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d Neither wine nor beer

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View Answer Wine

In autarky, the relative price of wine, in terms of beer, in country A is ?


a1W = 1B

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b 1W = 2B

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c1W = 3B

✓


d1W = 1/3B

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View Answer 1W = 3B

In autarky, the relative price of X, in terms of Y in A would be ?


a 1/2 Y

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b 3/4 Y

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c1 Y

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d 4/3 Y

✓


View Answer 4/3 Y

If the countries were to trade along the lines of absolute advantage ?


a A would export X to B

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bB would import Y from A

✓


cNeither country would want to trade

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dNone of the above

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Country A has an absolute advantage in__________?


aProduct X

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bProduct Y

✓


cNeither X nor Y

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d Both X and Y

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View Answer Product Y

Absolute advantage is determined by ?


aactual differences in labor production between countries

✓


b relative differences in labor productivity between countries

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cBoth (a) and (b)

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dNeither (a) nor (b)

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According to the Classical theory of international trade ?


aOnly countries with low wages will export

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bOnly countries with high wages will import

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cCountries with high wages will have higher prices

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dAll of the above are false

✓



The classical trade theories of Smith and Ricardo predict that ?


a Countries will completely specialize in the production of export goods

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bConsiderable trade will occur between countries with different levels of technology

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cSmall countries could obtain of the gains from trade when trading with large countries

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dAll of the above

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View Answer All of the above

International trade is based on the nation that ?


aDifferent currencies are an obstacle to international trade

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bGoods are more mobile internationally than are resources

✓


cResources are more mobile internationally that are goods

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dA country’s exports should always exceed its imports

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